China has claimed Taiwan as its territory since the Island split from the mainland after a 1949 civil war.

It has threatened to bring the island under its control by force if necessary.

Ma will formally take over on May 20, when Chen steps down after serving a maximum two terms.

Control over nation

Ma's victory gives the KMT overall control of the nation, as they had also crushed the DPP in parliamentary elections in January on the back of economic malaise and weariness over strained relations with China.

"Your voices are heard. People have the right to demand a better life. Only change can bring hope, only change can provide opportunities," Ma told supporters.

At the same time, Hsieh conceded defeat in front of despondent Democratic Progressive Party (DPP) supporters at his own headquarters.

"We accept defeat. It's my own defeat, it's not the defeat of the Taiwanese people. Please don't cry for me," he said.

Ties with China

Al Jazeera's Hamish MacDonald, reporting from Taipei, said that Ma's victory marked the beginning of a new era between Taiwan and mainland China.

"After eight years of DPP rule, people believe that things are about to change, " he said.

MacDonald said that though Ma has a strong mandate for his promised reforms programme, building stronger ties with China would take time.

"It's not going to be easy for Ma to walk into office and patch up the differences between the administration in Beijing and Taipei, " he said.

"Beijing considers Taiwan in exactly the same category as Tibet, an errant province that isn't really doing what it's supposed to.

"Most of the Taiwanese who voted for Ma yesterday, but that does not mean that they want to be a part of China, they still want their sovereignty to be respected."

Bush's message

George Bush, the US president, sent his congratulations to Ma on Saturday, saying his win was a new chance for China and Taiwan to resolve their differences.

"I believe the election provides a fresh opportunity for both sides (China and Taiwan) to reach out and engage one another in peacefully resolving their differences," Bush said in a statement on Saturday.

The vote had been closely watched by Beijing and Washington for signs that a new relationship would emerge between China and Taiwan after eight years of recurring tensions under Chen Shui-bian, the outgoing president.

Economic ties

China and Taiwan have had virtually no direct links since the island split.

In his campaign Ma proposed an overhaul of economic ties to allow Taiwanese companies access to the vast mainland market while permitting China to invest in its domestic market.

Incomes are stagnant as the island, the world's 17th largest economy, looses jobs and investment to mainland China.

MacDonald said Ma wants to move very quickly and establish direct flights to China as early as July 1, just two months after he takes over officially in May," he said.

"His belief is clear and if they are able to do that, then Taiwan would be able to go along for the economic ride with China" MacDonald said.

China provoked

Richard Madsen, a professor of Chinese studies at the University of San Diego, told Al Jazeera: "China had felt so provoked by the current president that it actually refused to have any dialogue at all with Taiwan. So anything will be an improvement on that.

"Ma has in the last few weeks said some very harsh things about the government in China.

"He has castigated them for what he's called their brutal crackdown in Tibet.

"Its not at all clear there are going to be very warm relationships any time soon, but at least the opening for dialogue will be there".

Two referendums on Taiwan joining the UN failed to muster enough turnout to make them valid, with less than 36 per cent of voters making the effort.

Taiwan lost its UN seat in 1971 to China, which has blocked its attempts to rejoin 15 times.